Swiss National Bank asked why the Fed is paying interest on excess reserves? Who knows?

With no velocity and no money multiplier how does monetary policy affect GDP.

Central bank liquidity swaps are negligible now, though it was high as high as ~$600B. Should be limits on the Fed’s ability to enter into liquidity swaps.

Fed credited $558 Billion to US Treasury for a “security” at some point in the crisis. (??)

Suggests segmenting the Fed’s lending operations. Should be able to review any entity that would receive emergency funds.

Q1 Venezuelan guy — Can we trust the helicopter pilots? How to loosen bank regulations?

Hanke: Regulation important when it changes a lot. Not usually considered at monetary policy, but it is. Private money has shrunk since the crisis. Ultratight regulation plus loose policy — means relatively tight policy. Forget Basel IV and roll back Basel III.

Q2 Student at Southern Methodist University: When have central banks done it right?

Hanke: China has been an outlier by ignoring Basel — may have other effects later.

Jordan: New Zealand often viewed as a successful Central Bank. Maybe Australia, Switzerland…

Q3 Joseph Marshall — How can things work well if we discourage savings?

Jordan: Savings glut = Investment glut (ex post). Lower rates often drive savers to save more to get to a target. Half-plus of US currency is held outside of the US. Investment spending 10-11% of GDP. Bailouts further consumption in bubble areas.

Q4 Gerry O’Driscoll — Todd: Blip in Treasury account balance may be drawdown in reserves. Promise to keep balance sheet constant until an exit is desired.

Jordan: Debt ceiling — large cash balance going into a debt ceiling period could be it.

Closing

Expresses gratitude to the speakers and Jim Dorn. Incident of some Russians printing their own currency. Top down central planning does not work, and threatens our liberties.